FEATURED ARTICLES ABOUT BANK SECRECY ACT - PAGE 2

First National Bank of Chicago on Thursday joined the parade of major banks that have admitted they failed to report major currency transactions with foreign banks as required by federal law. Continental Illinois National Bank and Trust Co. of Chicago said it had "looked into" its records of currency transactions for recent years "and found no particular problem for us." Banks have been reviewing their cash transaction reporting since First National Bank of Boston pleaded guilty last month to violating the Bank Secrecy Act of 1980 by failing to report $1.22 billion of cash dealings with European banks.

Feb 25 (Reuters) - Credit card company Discover Financial Services said it was being probed by the U.S. consumer financial watchdog over its unit's student loan servicing practices. The Consumer Financial Protection Bureau (CFPB) has issued a civil investigative demand to Discover Bank seeking information regarding certain student loan servicing practices, Discover said in its annual filing on Tuesday. () The unit, Discover Bank, is one of the major private student lenders that continue to issue student loans in the United States despite facing increasing competition from the government, which now issues most student loans.

The Treasury Department announced Tuesday that it has fined the Bank of America, the nation's second largest bank, a record $4.75 million for violating federal statutes requiring it to report all cash transactions larger than $10,000. Until Tuesday's announcement, the largest fine against a bank for violating the Bank Secrecy Act was $2.25 million, which was assessed last August against Crocker National Bank, a unit of Marine Midland Bank PLC of London, for failing to report 7,877 cash transactions totaling $3.98 billion.

A Cato Institute official blasted the federal Bank Secrecy Act last week, saying its reporting requirements on customer activities "do not belong in a free country, any more than would a law requiring the reporting of purchases of 'subversive' books and literature." Solveig Singleton of the libertarian think tank told the House Banking Committee that any benefits from the Bank Secrecy Act are negligible compared to the loss of privacy rights. The act, originally intended to help authorities sniff out tax evasion, has evolved into a means for fighting check kiting, money laundering and a variety of other illegal activities.

WASHINGTON, Jan 14 (Reuters) - U.S. banking regulators on Monday ordered JPMorgan Chase & Co to tighten controls over the risk of trading losses and comply more closely with measures aimed against money-laundering by bank customers. The Federal Reserve and the Office of the Comptroller of the Currency issued consent orders against the bank after it revealed billions of dollars in losses due to bad bets from a trader known as the "London Whale. " Regulators also ordered the bank to improve its compliance with the Bank Secrecy Act and anti-money laundering requirements.

Treasury Department officials have ruled out amnesty for banks that come forward and admit failing to enforce laws aimed at combating money laundering by drug traffickers and organized crime figures. "We intend no amnesty," said John Walker Jr., assistant secretary for enforcement for the Treasury Department. "And every bank that has come to us saying they did not file the proper reports has been told this." Walker's comments were made before the House Subcommittee on Crime, which is pushing for new legislation to make money laundering a specific crime.

National Republic Bank of Chicago, the area's biggest minority bank and an active lender to the U.S. lodging industry, has agreed to make a number of changes to its business to comply with a request from regulators, including maintaining certain capital levels and improving corporate governance. The Aug. 31 consent order with the U.S. Office of the Comptroller of the Currency comes three years after the $1.13 billion-asset bank was ordered to reduce its reliance on brokered deposits, which can be more costly for a bank, and to diversify the type of loans that it makes.

A federal grand jury Thursday returned a 63-count indictment against Shearson Lehman Brothers Inc., a former Shearson broker and six other men on charges involving a gambling and money-laundering scheme. The indictment, which drew a harshly worded response from Shearson, charged that between September, 1982, and July, 1985, Shearson and broker Herbert L. Cantley conspired with the six others to launder through accounts at Shearson the proceeds of an illegal bookmaking operation directed and owned by the seven men. Named in the indictment were Cantley, 46, who was sales manager for Shearson's Philadelphia office before being fired last year; Joseph Vito Mastronardo Jr., 36; Joseph Vito Mastronardo Sr., 59; John Vito Mastronardo, 30; John Hector, 39; Mario Scinicariello, 37, of Boca Raton, Fla; and Sheldon Schore, 31. Prosecutors said the Mastronardos ran a major East Coast sports gambling operation that handled bets on a wide range of college and professional sporting events.

With Justice Ruth Bader Ginsburg leading the way, the Supreme Court on Tuesday made it tougher to convict people of evading a currency-reporting law aimed at drug dealers and tax dodgers. The court ruled 5-4 that federal prosecutors must prove that defendants knew they were acting illegally when they deliberately divided cash transactions into amounts under $10,000 to avoid government scrutiny. Requiring such proof would protect innocent people, the court majority said. But the dissenters said the decision would make prosecutions for reshaping cash transactions "difficult or impossible in most cases."